HECM - Most Popular Reverse Mortgage

4/29/2007

posted by N. Sioris

Stumble It!

The most popular Reverse Mortgage is the Home Equity Conversion Mortgage, also referred to as the HECM. The HECM is federally insured through FHA and backed by HUD. The HECM reverse mortgage, for most people, offers the most money as well as the lowest interest rate.

90% of all the Reverse Mortgages originated in the United states in recent years have been HECM loans. The FHA insurance fund is what guarantees that the lender will always be able to make the payments to the homeowner. Or in the case of a line of credit, that the funds will always be available as long as the reverse mortgage is in effect.

Home Equity Conversion Mortgages are offered in every state as well as Puerto Rico. The maximum loan amount for HECM reverse mortgages varies by county and state. There is currently some discussion taking place among policymakers in Washington, DC about the advisability of making the maximum loan amount uniform throughout the nation, in the same way that Fannie Mae loans are.

To Qualify For a HECM Reverse Mortgage, all owners on title to the home must be at least 62 years or older. All applicants must take HUD counseling before they can make an application for a reverse mortgage. The counseling is done, to insure that seniors are fully aware of how a reverse mortgage works. During the counseling session seniors are advised of other options that they may not have considered. The counseling safeguard has gone a long way in helping seniors and their families feel well informed and comfortable when considering the prospect of a reverse mortgage.

You can locate HUD approved counselors through the AARP Foundation's Reverse Mortgage Education Project at 1-800-209-8085

You can also locate the HUD-approved counseling agency nearest to you by calling 1-800-569-4287.